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Even as the Federal Reserve continues to debase the currency in the hope of stimulating the economy while Washington fiddles, wealthy yield-starved investors have been feasting on a different kind of credit that behaves like a certificate of deposit and has been earning returns of up to 10.5%.

Lending Club, an online peer-lending network based in San Francisco, matches consumers to lenders and has made $1.1 billion in loans since its 2007 start. It has seen assets under management in two vehicles that bundle prime consumer loans into investment funds go from zero to $250 million in just 18 months.

The draw? High yields. Its riskier Broad Based Fund pays 9% on a portfolio of prime credits that have a default rate of just 2%. The returns are taxable as ordinary income, but investors who can ante up $500,000 and who are taxed at the top rate of 35% still walk away with a predictable stream of income that surpasses returns on many comparable credits.

Just ask Harvard economist and former Treasury Secretary Lawrence Summers, an apparently satisfied customer who joined the Lending Club board last week. (He also sits on the board of tech payment company Square, co-founded by Twitter's Jack Dorsey.) "Information technology is making possible important financial innovations for the benefit of consumers and families alike," he told Barron's.

To say nothing of the benefit to investors. Bon appétit!

Last Week: Review

Fed Moves on QE4

The Federal Reserve plans to vastly expand its $2.8 trillion balance sheet in 2013, with monthly purchases of $45 billion of long-term Treasuries and continued buying of $40 billion of other securities. The stimulus replaces its $45 billion of monthly purchases of long-term Treasury securities and sales of a like amount of short-term instruments. The central bank dropped its mid-2015 target of keeping rates near zero, now tying a rate rise to a jobless rate of 6.5% or lower. By the Fed's reckoning, that would keep short-term rates low into 2015.

Troops to Turkey

The U.S. will deploy two Patriot missile batteries to Turkey with 400 troops to help defend its ally against potential threats from Syria, U.S. officials said. The move comes amid a view that Syria's president, Bashar al-Assad, will fall.

Follow the Money

HSBC Holdings
agreed to pay a record $1.92 billion in fines to U.S. authorities as part of a deferred prosecution agreement with the Justice Department in which it acknowledged that for years it ignored possible money-laundering and failed to conduct basic due diligence on some of its customers.

Loss Warning for Big Lender

Deutsche Bank,
DBK.XE -4.017857142857143%Deutsche Bank AGU.S.: NYSEUSD18.275
-0.765-4.017857142857143%
/Date(1481300754412-0600)/
Volume (Delayed 15m)
:
3983523
P/E Ratio
N/AMarket Cap
24654507109.375
Dividend Yield
N/ARev. per Employee
381988More quote details and news »DBK.XEinYour ValueYour ChangeShort position
Europe's biggest lender, warned that additional restructuring costs will result in a big hit to fourth-quarter earnings that could end in a loss for the quarter. The bank also faces as much as 1.5 billion euros ($1.97 billion) in damages after being ruled liable for the insolvency of Kirch Media Group. Additionally, four employees were detained as part of a probe into suspected money laundering, and the bank is targeted in a probe into the manipulation of interbank rates.

Right-to-Work in Michigan

Michigan's Republican Gov. Rick Snyder signed "right to work" bills allowing workers in unionized shops in the public and private sector to opt out of paying union dues. The move in the state that produced the United Auto Workers follows curbs elsewhere in the Midwest.